Land Value and the Undersupply of Affordable Housing

Duncan Bowie, University of Westminster

Housing Studies AssociationYork 15-17 April 2014

Components of presentation

– Historical overview – theories of land

– Land and planning in 1909 and since - a century of reform

– Land costs and affordable housing : London case study

– Options for reform

Concepts of land

– Natural rights theory:

– Gerard Winstanley: Digger manifesto (1649)– Thomas Spence: Real Rights of Man (1775)– William Ogilvie:

Essay on Property in Land (1782)– Thomas Paine: Agrarian Justice (1796)– Patrick Dove: Elements of Political Science

(1850)

The Chartists and land

– Feargus O’Connor : The Chartist Land Plan and peasant proprietorship

– Bronterre O’Brien and land nationalisation

– The Land and Labour League, the First International . Marx and Martin James Boon

Mid/late Victorian radicals and land

– James Stuart Mill and the Land Tenure Reform Association

– Abolishing primogeniture ; Limiting inheritance; Free transfer of land

– Alfred Russell Wallace and the Land Nationalisation Society

– Henry George and the Single Tax

Pre WW1 Legislation and land

– 1909 Housing and Planning Act. Tax on undeveloped land ; tax on development value – 50% on increase arising from town planning

– 1910 Budget (Lloyd George) 20% tax on capital gains on disposal of land

– 1920 Land taxes repealed. Repayment to landowners.

The collectivisation of land value

– The radical attack on the ‘unearned increment’

– Royal Commission on Housing of the Working Classes (1885) supported taxation of development land

– Betterment and civic enterprise

– The role of the London County Council

– The Association of Municipal Corporations

– The National Housing Reform Council

– The Workman’s National Housing Committee

– Ebenezer Howard, the Garden City movement and the trustification of land value appreciation

Post WW2

– 1944 Uthwatt report on betterment

– 1947 Town and Country Planning ActNationalisation of development rights.

– 100% development charge on development land payable to Central Land BoardCompensation payable to landlords who were refused right to develop land

– 1952 Repealed by Conservative government

The 1960’s

– 1967 Land Commission Act Establishment of land commission with power to acquire, manage and sell land

– 40% levy on land disposalsBetterment levy -40% on land sold, leased or realised by development. Collected by commission and paid to central government.

– 1970 Repealed by Conservative Government

The 1970’s

– 1975 Community Land Act. LA had power to acquire development land at current use value.

– 1976 Development Land Tax Act. 80% tax on development gains (66.6% tax on first £150,000).(50% to LA; 30% to central govt; 20% to LA pool)

– 1980 Repealed by Local Government, Planning and Land Act

1990 and Beyond

– 1990 Town and Country Planning Act s106 Provisions for Local Planning authorities to seek contributions to community benefit related to a planning consent – planning gain/planning obligations Not a tax

2011 Localism Act. Power for Local Planning Authorities and Mayor of London to introduce Community Infrastructure Levy – a tax on new development

Land and housing costs

Land costs per hectare- 1983-2010 England (excluding London)

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London house prices since 1996

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Mean Quarterly London House prices since 1996

Mean Quarterly Houseprices 1996 Q1 to 2013 Q3 – City of Westminster

Westminster

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Land costs before the recession £m per hectare in 2007/8

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Land costs in London before the recession: £m per hectare in 2007/8

Land and Industrial Site Values: Outer London and South East (VOA Jan 2011)

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Industrial land £m per hectare

Suppressing land costs

– Getting public land into development programme at discounted value

– LA power to CPO sites at existing use value (EUV)– unallocated sites

– Limiting uplift in relation to EUV for consented sites ( maximum uplift of 20% ?)

Ensuring public share in development gains

– The problem of s106, CIL and development viability

– Joint ventures

– Public sector equity stakes in development

– Reactivating the Betterment principle – taxing value appreciation post consent